China Stocks fall on profit booking

The Mainland China share market finished session down after reversing early gains on Tuesday, 16 November 2021, as investors opted to book profit after cordial opening to a key meeting between U.S. President Joe Biden and Chinese leader Xi Jinping

At close of trade, the benchmark Shanghai Composite Index fell 0.33%, or 11.51 points, to 3,521.79. The Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped 0.51%, or 12.44 points, to 2,449.95. The blue-chip CSI300 index edged up 0.02%, or 0.94 point, to 4,883.32.

U.S. President Joe Biden and Chinese President Xi Jinping started closely-watched virtual meeting warmly, with both leaders stressing their responsibility to the rest of the world to avoid conflict, with the Chinese leader calling the U.S. President an "old friend".

Sino-U.S. ties have endured a prolonged period of tensions under the former Trump administration and both sides have recently escalated a war of words over a broad array of contentious issues including Taiwan as well trade and technology. The see-sawing tensions between the world's two top economies have jolted global markets at various times over the past few years, so any optimism coming out of the talks would be seen as a boon to riskier assets.

The defence sub-index dropped 3.9% amid easing tensions between U.S. and China in the meeting. Consumer staples gained 1.6%, with liquor makers surging nearly 4%. Healthcare shares went up 2.7%.

ECONOMIC NEWS: China's finance ministry has set the 2022 renewable power subsidy at 3.87 billion yuan ($607.26 million on Tuesday. The ministry will allocate 1.55 billion yuan to wind farms, 2.28 billion yuan to solar power stations and 38.24 million yuan to biomass power generators.

CURRENCY NEWS: China's yuan climbed to five-month high against the U.S. dollar on Tuesday as traders welcomed dialogue between the U.S. and Chinese presidents.

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